Chancellor Rachel Reeves delivered her Spring Statement to the House of Commons on Tuesday 03 March.
With the government committed to ‘a single major fiscal event a year,’ the statement focused on the latest forecasts for the UK economy, without introducing any major tax or personal finance measures.
Here’s a closer look at the key updates and what they could mean for your savings.
Growth to slow before picking up in 2027
The Office for Budget Responsibility (OBR) revised its economic growth forecast for 2026 down to 1.1% from the 1.4% it predicted in November. Despite this slowdown, growth is expected to pick up to 1.6% in both 2027 and 2028, before easing back to 1.5% in 2029 and 2030.
Overall, these forecasts point to moderate but stable growth in the years ahead. However, they do not account for recent developments in the Middle East, which the OBR warned 'could have very significant impacts on the global and UK economies.'
GDP per person is set to grow more than was expected in the Autumn with growth of 5.6% over the course of this Parliament and by the next election, after accounting for inflation, people are forecast to be £1,000 a year better off per year.
Inflation to return to 2% target
Inflation is now expected to ease sooner than forecast at the Autumn Budget. The OBR projects inflation will fall from 3.4% in 2025 to 2.3% this year, before returning to the Bank of England’s 2.0% target in 2027.
Meanwhile, the Bank of England expects inflation to fall back to 2% later this spring. If the economy evolves as anticipated, there could be scope for further base rate cuts this year.
After its surprise plummet in February, it was reasonable to expect that CPI would continue to fall over the coming months. Falling inflation could ease pressures on pricing and the cost of living and may encourage employers to create more jobs.
Yet geopolitical uncertainty means these projections could quickly become outdated. Flagstone’s Katie Horne explains what this could mean for savers:
'While it puts undesirable pressure on the cost of living and servicing mortgages, if the base rate doesn't fall and interest rates subsequently stay higher for longer, this creates opportunities for savers determined to put their hard-earned cash to work.'
Cash ISA allowance cut confirmed for 2027
The Spring Statement did not introduce any new changes to cash ISAs and reaffirmed the course set by last year’s Autumn Budget.
From 06 April 2027, the annual tax-free Cash ISA allowance will fall from £20,000 to £12,000 for savers under 65. Those aged 65 and over will retain the £20,000 allowance.
The reduction does not take effect until 2027, so there’s still time to make the most of the current £20,000 cash ISA allowance before the tax year ends on 05 April 2026.
Salary sacrifice pension cap to be implemented from April 2029
Rachel Reeves left pension rules unchanged, but previously announced reforms remain in place. One key change is the pension salary‑sacrifice cap.
From April 2029, only the first £2,000 of pension contributions made via salary sacrifice will be exempt from National Insurance. Amounts above this threshold will be treated as normal salary.
For savers using salary sacrifice to maximise retirement contributions, it may be worth reviewing your approach now to understand how this cap could affect future tax efficiency.
What happens next?
As expected, the Spring Statement focused on the economic outlook, with no major new policy measures announced.
With fresh forecasts for inflation and growth, it's a good time to review your savings strategy. Attention now turns to the Autumn Budget, when the government is more likely to introduce substantive tax and personal finance measures.
Optimise your savings with Flagstone
Amid economic and geopolitical uncertainty, savers like you need flexibility and access to competitive rates. That’s where Flagstone comes in.
With access to hundreds of savings accounts from over 65 banks, you can compare rates, switch accounts, and track savings performance. All in one platform, with a single login, and a minimum deposit of £10,000.
